That is, they won’t take a deduction in calculating their UK total taxable profits for royalties, coffee beans or interest payments made to other group companies.

This basically means they have opted for “double taxation”. That is, they get taxed twice on the same income. In this instance, income will get taxed in the UK despite the fact that it has been used to pay another company, say in the Netherlands.

Now, this Dutch company gets taxed on its income from the UK company. Normally, where an expense isn’t allowed for tax purposes in one country, the corresponding income may not be taxed, specifically under the provisions of the two jurisdictions’ double tax agreements.

If the expense were to be disallowed, by whatever mechanism, and the income is still taxed in the Netherlands, you get double taxation.

Now, Starbucks have, uniquely I think, volunteered to go beyond even this and implement a commitment to “triple taxation”. Or so it appears.

On top of unilaterally disallowing intra group transactions, Starbucks have offered to not claim trading losses brought forward. The trouble is, trading losses are intended to be offset against the earliest profits.

This is on account of CTA 2010, s 45(4)(b) which states that so many brought forward losses may be utilised in a year as cannot be utilised in any previous year.

This means that even if HMRC accept that Starbucks don’t have to utilise the losses in the first year of profits, their losses brought forward should be reduced by the amount of losses that would have been used.

These losses represent profits of Starbucks business that have been, in part, created by intra group transactions which have created profits elsewhere.

By writing off these losses without taking relief against the profits, they will be taxing income that would not have otherwise been taxed. This is effectively the third time that this income will be treated as taxable profits.

Or, rather, it is the second time that the income has declined relief in the UK whilst still being taxed as profits overseas.

This is, quite simply, insane. It is insane that Starbucks are in a position where they felt that it is worth being taxed three times on the same income in order to save their reputation.

It is insane that the likes of UKuncut don’t seem to appreciate that Starbucks have paid more tax on account of making unrelieved losses in the UK whilst being taxed elsewhere, and then when Starbucks offer to tax themselves three times as recompense, UKuncut turn up at their stores regardless to intimidate employees and customers. Talk about ingratitude!

So when you drink a Starbucks latte next year, that bitter aftertaste you get will be the complete opposite of tax avoidance. It’s the taste of a triple shot of taxation.